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Case Summaries.
By Morris James LLP on April 10, 2005
Tracinda Corp. v. DaimlerChrysler AG, 362 F.Supp.2d 487 (D.Del. 2005).
Tracinda Corporation ("Tracinda"), a Nevada entity with its principal place of business in California, was engaged in investing in companies and at the time was Chrysler's largest shareholder. Tracinda brought this action against defendants comprising of DaimlerChrysler AG, Daimler-Benz AG ("Daimler"), Jurgen Schrempp and Manfred Gentz, (collectively "Defendants") who were citizens of Germany alleging: (1) violations of securities laws; (2) common law fraud; and (3) conspiracy in connection with the 1998 merger between Chrysler Corporation ("Chrysler") and Daimler-Benz AG ("Daimler-Benz"). In this Memorandum Opinion, the Court examined a number of evidentiary objections brought by both parties. The objections included: expert opinion testimony, statements made by the CEO of the German manufacturer that were published in a newspaper, investment banker documents discussing business combination scenarios between the merger parties, third-party research reports, meeting notes on the merger, failure to include charts and privileged attorney-client matters.
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By Morris James LLP on April 5, 2005
NuCar Consulting, Inc. v. Doyle, 2005 WL 820706 (Del. Ch. April 5, 2005). Plaintiff NuCar Consulting, Inc., claimed that Defendants, former employee Timothy Doyle and Doyle's newly created company, Dealer Rewards, Inc., misappropriated certain of NuCar's trade secrets. NuCar requested that the court determine whether Defendants misappropriated NuCar's trade secrets under the Delaware Uniform Trade Secrets Act and the extent to which NuCar should receive monetary damages or injunctive relief for the alleged misappropriation. NuCar also sought an award of attorney's fees pursuant to 6 Del. C. - 2004 for Defendants' allegedly willful and malicious misappropriation. The Court granted NuCar's request for a permanent injunction prohibiting Defendants' further use of the contract used for automotive deals and found Defendants liable for $69,750 in unjust enrichment damages for their misappropriation of the potential client list. Finally, the Court found that Defendants' misappropriation was willful and malicious and awarded NuCar its reasonable attorney's fees expended on its misappropriation of trade secrets claims. More ›
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By Morris James LLP on April 1, 2005
Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 872 A.2d 611 (Del. Ch. 2005).
Wal-Mart brought suit against all the parties involved in its purchase of corporate-owned life insurance ("COLI") policies. Its complaint alleged a broad range of legal and equitable claims against the insurance brokers and providers, all seeking to recover from them the losses it incurred in connection with this risky tax avoidance scheme. On consolidated motions to dismiss brought by the insurers and brokers, the court concluded that the retailer failed to state a claim upon which relief could be granted. The court, therefore, granted the defendants' motions to dismiss.
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By Morris James LLP on March 31, 2005
Examen, Inc. v. VantagePoint Venture Partners 1996, 873 A.2d 318 (Del. Ch. 2005).
The plaintiff, a Delaware corporation, sought a judicial declaration that Delaware law governed a stockholder vote on a pending merger because if the vote was governed by Delaware law, common stockholders and preferred stockholders would vote on the merger as a single class. The defendant, a large venture capital firm owning 83% of the corporation's preferred stock, argued that California law controlled because if California law were to apply in determining the voting rights of the Delaware corporation's stockholders in connection with the proposed merger, the preferred stockholders would have the right to vote as a separate class, effectively giving the defendant a veto over the merger. The court granted plaintiff's motion for judgment on the pleadings finding that Delaware law applied because this case was governed by the internal affairs doctrine.
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By Morris James LLP on March 30, 2005
Wilmington Savings Fund Society v. Chillibilly's, Inc., C.A. No. 03C-11-021 THG, 2005 WL 730060 (Del. Super. Ct. March 30, 2005), aff'd,
886 A.2d 1279 (Del. 2005).
Wilmington Savings Fund Society ("WSFS"), the plaintiff, sought replevin of certain collateral it claimed pursuant to a contract it held with Chillibilly's Incorporated ("Chillibilly's") and Joseph Jeffery Stein Corporation ("Stein Corp.") WSFS also alleged fraud, misrepresentation, and various other claims. Essentially, WSFS argued that it was induced into extending a loan to Chillibilly's based on certain misrepresentations by the principal of Stein Corp., Jeffrey Stein. Stein Corp. moved for summary judgment. The Court denied the motion as to replevin of items Stein Corp. had earlier conceded belonged to WSFS pursuant to its security interest. However, the court granted summary judgment as to the other claims.
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By Morris James LLP on March 24, 2005
DCV Holdings, Inc. v. ConAgra, Inc., C.A. No. No. 98C-06-301-JEB, 2005 WL 698133 (Del. Super. Ct. March 24, 2005).
The Plaintiffs brought an action against ConAgra, Inc. ("ConAgra") and E. I. Du Pont de Nemours and Co. and Du Pont Chemical and Energy Operations, Inc. (collectively "DuPont"). The Plaintiff alleged that the defendants committed common law fraud. In a bench trial, the Superior Court found for the defendants.
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By Morris James LLP on March 22, 2005
State ex rel. Brady v. Pettinaro Enterprises, 870 A.2d 513 (Del. Ch. 2005). Attorney General brought consumer protection action under the Consumer Fraud Act, the Deceptive Trade Practices Act, and the Health Spa Regulation against developer of condominium complex, alleging, among other things, that developer misled condominium purchasers into believing that clubhouse was part of the complex. Developer moved to dismiss action on the basis that the statute of limitations barred the Attorney General's claims and for failure to state a claim under the Deceptive Trade Practices Act. The court granted in part and denied in part Defendants' motion to dismiss. More ›
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By Morris James LLP on March 15, 2005
The Capital Group Companies, Inc. v. Armour, 2005 WL 678564 (Del. Ch. Mar. 15, 2005).
A Delaware corporation brought suit against the two trustees of a trust, who are husband and wife, seeking a declaration that certain contractual stock transfer restrictions alleged to apply to shares of its common stock owned by the trust were valid and enforceable. The two defendants were parties to a divorce proceeding and, in connection with that proceeding, the wife claimed an interest in the stock owned by the trust. The issue was whether the stock transfer restrictions could reasonably operate to prevent the transfer to, or disposition in favor of, the wife of any legal or beneficial interest in the stock.
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By Morris James LLP on March 12, 2005
Benitec Australia Ltd. v. Promega Corp., No. Civ. A. 04-889 JJF, 2005 WL 549552 (D.Del. Mar. 8, 2005).
The defendant filed a Motion For a Preliminary Injunction seeking to preserve its rights as an exclusive licensee for the duration of the law suit brought by plaintiff against defendant Promega Corporation ("Promega"). The Court denied the injunction.
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By Morris James LLP on March 10, 2005
Shamrock Holdings of California, Inc. v. Arenson, No. Civ. 04-1339-SLR, 2005 WL 400198 (D.Del. Jan. 27, 2005).
Plaintiffs commenced an action for declaratory relief pursuant to 10
Del. C. §§ 6501
et seq. (2004) in the Delaware Court of Chancery. The defendants had earlier threatened to sue the plaintiffs for "millions of dollars." The defendants removed the action to the federal court and filed separate motions to dismiss which were stayed under mutual stipulations, pending resolution of plaintiffs Motion to Remand. The Court ordered the defendants to supplement the record with respect to certain corporate members of defendants SELK and Laurel Equity Group, LLC. The Court also admonished the defendants that a failure to timely supplement the record would result in the grant of plaintiffs' Motion to remand.
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By Morris James LLP on March 10, 2005
Kier Construction, Ltd. v. Raytheon Co., 2005 WL 628498 (Del. Ch. Mar. 10, 2005).
This action arouse out of a construction subcontract between plaintiff, Kier Construction, Ltd. ("Kier"), and a non-party, Raytheon Engineers & Constructors, UK Ltd. ("REC UK"). Kier claimed it was owed over $12 million for work performed under the subcontract. Kier contended that the contract with REC UK was transferred to defendants, Raytheon Company ("Raytheon") as part of a transaction in which Raytheon sold REC UK and other subsidiaries to Morrison Knudsen Corporation. Kier contended that Raytheon, as REC UK's assignee, was directly liable to Kier for the work it performed under the subcontract.
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By Morris James LLP on March 4, 2005
Scottsdale Indem. Co. v. Lloyd, 04C-04-024 THG, 2005 WL 516852 (Del. Super. Ct. Mar. 4, 2005).
A corporation's commercial liability insurer petitioned the court for a determination as to whether the policies automobile exclusion prevented coverage for damages arising from an accident involving one of the corporation's officers. The insurer moved for summary judgment, and the Superior Court found that the automobile exclusion did apply.
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By Morris James LLP on March 4, 2005
Gilliland v. Motorola, Inc., 873 A.2d 305 (Del. Ch. 2005).
Plaintiff sought a class-wide "quasi-appraisal" remedy for minority stockholders eliminated in a short-form merger. Statutory appraisal was impractical for two reasons. First, formalistically, the minority stockholders no longer owned shares in the merged subsidiary and without the shares, they could not make the demand required by the appraisal statute. Second, from a practical standpoint, the two-year delay made it impossible to recreate the factual context necessary to have statutory appraisal. Therefore, Vice Chancellor Lamb granted the quasi-appraisal remedy and outlined its procedure.
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By Morris James LLP on March 3, 2005
Amaysing Technologies Corp. v. CyberAir Communications, Inc., 2005 WL 578972 (Del. Ch. March 3, 2005).
Amaysing Technologies Corp. ("ATC") brought an action for breach of a loan agreement against CyberAir Communications, Inc. ("CyberAir"). CyberAir filed a third-party complaint alleging various misrepresentations and frauds against Robert Mays, Jr., and Raymond Atilano, both of whom were officers and shareholders of ATC, and Med Fadel, an agent of ATC (together referred to as "Third-Party Defendants"). Third-party Defendants filed a motion to dismiss under Court of Chancery Rule 12(b)(2) for lack of personal jurisdiction, which the court granted.
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By Morris James LLP on March 1, 2005
TIG Ins. Co. v. Premier Parks, Inc., C.A. No. 02C-04-126 PLA, 2005 WL 468300 (Del. Super. Ct. Mar. 1, 2005).
This case involved whether TIG Ins. Co. ("TIG") met its contractual obligations to provide adequate counsel to defend Premier Parks, Inc. ("Six Flags") in an employment discrimination case. After initially granting plaintiff's motion to compel discovery, the court limited its ruling on reargument after it became clear that complying with the court's order would require manual searches of files rather than simple electronic searches.
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